a. Australia is the world’s safest place for nuclear. This is a key comparative advantage that can underpin national wealth.
b. Australia has huge uranium resources in the Woomera Prohibited Area.
c. Enrichment could occur within the Woomera Prohibited Area. This has been already expressed.d. Nuclear energy generation has a small land footprint.e. Burial of waste could occur in secure circumstances.f. The concept of a ‘nuclear zone’ in Australia’s Outback should be approved by Australian voters in a national referendum.

2. ‘Asia’ (ie China, Japan, South Korea, the Association of Southeast Asia Nation states, Australia) needs trillions of dollars of new energy, transport and telecommunications infrastructure between now and 2050.

1. Asia should enhance interconnection between the infrastructure projects above and new ones yet to be built.

2. Asia should ‘bundle’ new power line, natural gas and fiber optic infrastructures to create more flexible cross-border energy and information networks. Building this network would require annual investment of 1-2% of Asian GDP over 40 years.

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Introduction

With nuclear power, Asia can have it both ways.

Asia can enjoy the benefits of cheap, clean, safe nuclear power while avoiding the devastating danger to civilian populations of nuclear accidents.

Asia can do this by ‘closing’ the nuclear cycle through quarantining it to the area around the uranium mines that feed the industry.

That, in turn, leads to the remote South Australian Outback.

If Asia goes nuclear, ‘closing the nuclear cycle’through geographic quarantine will ensure the safety of billions of people.

This study examines the potential of this idea, contrasting it to the highly cavalier, ad hoc way the industry is currently developing in Asia.

To give one example, China’s now planning to build dozens of nuclear plants where hundreds of millions of people live. This creates big risk.

Indonesia’s considering building nuclear power plants in an earthquake zone (Bangka Island) near Singapore. Vietnam is building Russian-designed nuclear plants (enough said).

Meanwhile, Japan is seriously considering giving another chance to an industry with a demonstrated history of carelessness.

Malaysia and the Philippines haven’t made up their minds about nuclear power. But both have developed detailed plans.

This report analyses how the unique attributes of nuclear power industry argue strongly for ‘closing the nuclear’ cycle through geographic quarantine.

Value-added nuclear energy could then be transmitted from the quarantine area to market, keeping populations and radiation danger separate.

In Asia, only Outback Australia fits all the criteria for geographic quarantine. And the Woomera Prohibited Area, a highly-secure, and isolated military base in the middle of nowhere, offers an unparalleled opportunity.

It would consolidate the industry in one place make best use of scarce nuclear talent.

It would eliminate the ‘nuclear miles’ dangerous materials must travel.

This reduces proliferation risk.

This safety and stability can be achieved through geographic quarantine by ‘closing the nuclear cycle’ within a small area located close to uranium mines. Only the value-added power would then be exported, leaving accident and radiation risk behind.

Quarantining a regional nuclear industry in Australia’s isolated Outback creates economies of scale — creating a synergistic business case for investment in the large-scale infrastructure required to transport the nuclear energy to market.

Thinking regionally, this benefits everyone.

Australia is best suited to safely handle Asia’s nuclear risk. In return,Australia receives compensation for managing this risk through selling value-added power.

Everyone comes out ahead. (IMAGE: Nuclear Asia)

Within Australia, one place is ideally suited to handling this risk. The Woomera Prohibited Area, one of the most isolated areas of Asia, is now being turned over to private sector development. This could become a resource for all of Asia.

The price premium paid by ‘Asian’ consumers for Australia’s nuclear power could also be thought of as an ‘insurance’ premium for transferring avoided disaster risk from Asia to Australia — where it can best be handled safely.

These risks are sizable. For instance, the $300 billion Fukushima disaster in Japan is equal to US 4c for each kilowatthour generated in Japan by nuclear power since 1983.

This puts a price, albeit a crude one, on nuclear risk.

At present, this ‘moral hazard’ cost is dumped on governments, taxpayers and the public. It needs to be transferred to the nuclear industry as a cost of doing business.

The global energy economy is now in a transition period away from dirty coal and toward the ‘Golden Age of Gas’ (a phrase developed by the International Energy Agency). This ‘Golden Age of Gas’ will in turn give way to a subsequent low-emission economy dominated by renewables by 2050 or so.

Unfortunately, infrastructure is now being built for the ‘Golden Age of Gas’ is not being built with an eye to the long-term.

The problem is that Liquid Natural Gas infrastructure now being built in Asia and elsewhere as the main means for long distance transport of natural gas, is inflexible, single-purpose, single-generation technology.

A far better infrastructure to build over the long term would be long-term, integrated networks of pipelines, high capacity power lines and fiber optic cables that can speed the shift to renewables.

Such ‘bundled’ infrastructure would enable energy markets to evolve with technology. To cite one example, natural gas pipelines built today could carry biofuels and hydrogen later. LNG can’t do this.

Building energy infrastructure today for the gas and renewable energy industry enables it — if necessary — to be repurposed for the nuclear industry. This represents a ‘call option’ of immense value.

If renewables like solar are unable to take over from natural gas as a primary low-emission energy source by 2025, a nuclear industry can be built in Australia’s Outback that could feed into an already-built international distribution system.

A bundled Pan-Asian Energy Infrastructure would allow the nuclear industry to use overnight low-demand periods to create hydrogen. This could be shipped to market through pipelines alongside electricity power or through underutilised power lines for storage at the consumer end.

This increases the energy delivery capacity of nuclear, making better use of nuclear’s need to be run constantly, regardless of fluctuating downstream demand.

The benefits for Asia are clear.Asia needs infrastructure. Building it out correctly offers a valuable opportunity to develop nuclear down the track.

Grenatec concludes geographic quarantine is the only way to avoid the ‘moral hazard’ risks of nuclear energy.

Outback Australia is the only place in Asia where such quarantine is practical.

Australia’s Woomera Prohibited Area

Australia’s Woomera Prohibited Area (WPA) is the ideal place to situate a safe nuclear energy industry for all of Asia.

The Woomera Prohibited Area is located in one of the most sparsely inhabited areas of Asia.(IMAGE: Woomera Prohibited Area)

The Woomera Prohibited Area is in Australia, an advanced industrial country with credible laws and safety regulations.

The Woomera Prohibited Area is located near large uranium supplies.

The Woomera Prohibited Area is huge. At 127,000 square kilometers its nearly one-quarter larger all by itself than South Korea (98,000 sq. km.). The Woomera Prohibited Area offers virtually unlimited space for nuclear industry expansion.

Better yet, there’s only road to where the industry would be located, and that road ends there. What’s more, the Woomera Prohibited Area is a military base. Both ensure security.

The Woomera Prohibited Area also is located in a region brimming with low-emission energy resources. These range from conventional and unconventional natural gas to geothermal, sun, wind and even large-scale algal biomass.

In early 2013, the Woomera Prohibited Area was opened up to private development.

The ostensible aim has been to open up the moribund range to minerals exploration. But a far higher use would be as a location to ‘close’ the nuclear cycle.

This is a once in a generation opportunity make use of of an incredible asset for the benefit of both Australia and all of Asia.

A massive nuclear industry could be placed at the eastern edge of the rocket range, close to Roxby Downs.

Within the range, a scaled, closed-cycle nuclear industry could produce clean energy for Australia and Asia under geographic quarantine.

Elsewhere within the range and the sun-baked region, solar power could be produced using the the same delivery infrastructure.

Given that advocates of nuclear power claim the power source is inevitable and must be developed, this provides an opportunity to do so in a safe, isolated location. If all goes well, the next generation of nuclear power plants can be built near Asia’s cities — sometime around the year 2100. (IMAGE: South Australia)

Grenatec proposes the Woomera Prohibited Area be used to generate a large proportion of — if not all — of Asia’s nuclear energy.

It could do so under the watchful guard of a multinational force of Australian, US, Chinese and Association of Southeast Asian Nations (ASEAN) troops.

It could also become the centrepriece of an entirely re-engineered Australian energy system based upon development and delivery of future energy sources — with South Australia in the center of it all.

These energy sources would range from carbon capture and storage at Moomba, development of conventional and unconventional gas in the Cooper Basin and elsewhere, and development of solar, wind and geothermal energy throughout the continent. (IMAGE: Australia-Present-Future)

This future development concept would replace the demonstrably worst case path the nation is now on of export coal and liquid natural gas — both highly-damaging sunset industries.

To learn more about the expanded concept above, read some of Grenatec’s other research. This report concerns nuclear energy, which could serve as the core investment in a new Australian energy future — with South Australia’s Woomera Prohibited Area at the center of it all.(IMAGE: Nuclear Warning Sign)

Risks To Asia

Nuclear energy presents risks and opportunities for Asia.

The risks come from haphazard siting of nuclear plants and the accident exposure this creates. The opportunities come from the huge potential for safe ‘closed cycle’nuclear generation in the Australian Outback.

In coming years, Asia needs huge amounts of electricity.

During this period, Asia will become the world’s largest regional economy.

To meet economic growth targets, Asia needs to spend trillions of dollars on energy infrastructure of every kind, ranging from mining energy sources to generation of electricity to transmission of power to end users.

Nuclear should be part of this mix, IF it can done safely.

Mitigating Risk: The Disaster Cycle of Nuclear

The commercial nuclear energy industry has been around since 1954.

Since then, there have been three major nuclear accidents: Three Mile Island (1979), Chernobyl (1986)and Fukushima (2011).

That’s an accident roughly every 20 years.

Under this 20-year accident cycle, the next nuclear accident should occur around 2031.

On current trends, this ‘next accident’ will almost certainly happen in China.

That’s because by 2031, China could have 200,000 MWs of nuclear power generating capacity up and running.,

All of this capacity will be located in highly-populated areas. It is, in short, an accident waiting to happen.

Just as China’s headlong pursuit of industrial development caused pollution to be overlooked until it became a national problem, nuclear’s risks as an energy source are similarly being overlooked, creating a major problem for China when an accident happens. (IMAGE: China Nuclear Power)

Were a serious nuclear accident on the scale of Fukushima were to occur along China’s ‘nuclear coast,’ huge populations could be at risk. A large amount of globally-important industrial capacity also could be taken offline as large-scale evacuations take place.

Global trade could be affected. That’s because much of world ocean shipping trade passes through Chinese coastal waters going to and from Japan, South Korea and Hong Kong.

China’s comparative advantage lies in labor, not nuclear power. For years to come, China will need to import uranium to burn in nuclear plants (an unfamiliar industry) in populated areas highly at risk.

Fukushima’s $300 billion of costs on a Japanese economy of $5.7 trillion amounts to more than roughly 5% of GDP.

Put a different way, $300 billion amounts to 4c for each kilowatt hour of nuclear electricity Japan has generated since 1980. Adding this ‘4c-per-kilowatt-hour risk’ raises the real costs of nuclear power significantly — and it’s almost certainly an underestimate.

That’s because the real cost of Japan’s Fukushima disaster is much higher when other factors are taken into account.

These involve long-term radiation hazards, lost infrastructure and evacuated civilian populations– not to mention the widespread social trauma these accidents create.

An equivalent size Chinese nuclear disaster in 2031 (in percentage terms) could cost up to $800 billion and present a huge risk to the global economy

To mitigate this risk, Grenatec suggests a different paradigm for developing nuclear power in Asia.

With a Pan-Asian Energy Infrastructure built in the region, the infrastructure could carry both renewable energy and nuclear power.

Prices would be adjusted for distance, carbon and time of day. This creates a more efficient market for the price mechanism to steer investment.

Australia: World’s Safest Location For Nuclear

Australia is the world’s safest location to generate nuclear power, according to the NTI Nuclear Materials Security Index.

Given its uranium, technological sophistication and its secure, isolated Australia can be Asia’s ‘safe pair of hands’ when it comes to developing nuclear energy.

Therefore, Australia has a moral responsibility to make the trade as safe as it can. Bringing this nuclear trade in-house is the best way to do this.

Therefore, the coming 10 years should be devoted to building up a Pan-Asian Energy Infrastructure and developing the renewable energy sources to put across this infrastructure.

Should these renewable energy sources prove insufficient to meeting Asia’s energy demand, Generation IV nuclear power plants serving all of Asia could be built in the Woomera Prohibited Area beginning sometime after 2020.

Australia has only a small population. Given this, the risk to humanity of the next nuclear accident — now slated for 2031 — would be less.

Woomera Prohibited Area: Australia’s Safest Location for Nuclear

The Woomera Prohibited Area, an underutilised rocket range in isolated central Australia, is equivalent in size to England.

The Woomera Prohibited Area is being opened up to industry.At present, this means ramping up mining exploration for uranium. That makes the timing advantageous.

The Woomera Prohibited Area is reached by just one road. It offers absolute security. It could also handle a Chernobyl-sized radiation release without affecting any sizable population areas.

Woomera, Roxby Downs, Olympic Dam

The Woomera Prohibited Area is a perfect place to establish a ‘cradle to grave’ nuclear industry. (IMAGE: Australia’s Woomera: Safest Place in Asia for Nuclear Power)

Skilled personnel could be concentrated in one area. That would make the best use of skill shortages in the nuclear field likely to last decades.

The industry could carry unlimited private insurance — which would be cheap given the non-existent risk.

This would put a professionally-derived price on nuclear risk by experts– a prime cause of previous nuclear accidents.

In those accidents, ‘government capture’ by the nuclear industry thas led to substandard siting of nuclear plants. The result has been massive ‘moral hazard.’ This needs to be removed if the industry is to gain a ‘social license.’

It can gain this license through insurance at Woomera.

The price of this insurance would offer a handy proxy for ongoing professional confidence in the competence of the industry. The value of this would be immeasurable in catching problems early.

Senior executives of the private companies developing and generating nuclear power at Woomera would be legally-required to live onsite. By law, they would be the last evacuees in an emergency.

These two measures — requiring unlimited private insurance and requiring senior executives to live onsite — would concentrate minds on safety and reduce the ‘moral hazard’ risks of nuclear energy.

Had a similar setup been in place in Chernobyl or Fukushima, more attention would have been paid to safety.

Surplus nuclear energy produced at Woomera can create large buffer supplies of electricity both to South Australia and Australia as a whole. These could be stored in various pipeline or power line medium from hydrogen to compressed air either upstream or downstream in the energy delivery system. (IMAGE: HVDC Power Lines Could Carry Nuclear Energy)

Maralinga, where post World War II nuclear weaponry were tested, shows the easy ability to just walk away from large contaminated areas in isolated regions of Australia.

Most importantly, however, Roxby Downs is located adjacent to the Woomera Prohibited Area.

Given that BHP is already mining uranium at Olympic Dam, downstream nuclear industries could be located in the same place to reduce the ‘nuclear miles’ dangerous nuclear materials travel.

This increases nuclear industry safety immensely.

In France and Japan, enrichment facilities are often adjacent to nuclear power plants.

Closing the nuclear cycle eliminates the need to ship nuclear materials over a crowded global transport system vulnerable to pirates and terrorists. Locating the entire nuclear industry at Roxby Downs eliminates this risk.

Given this, Australia’s nuclear industry (apart from mining) could be entirely located in the Woomera Prohibited Area, the eastern boundary of which isjust a few kilometers west of the Olympic Dam mine and Roxby Downs township.

Nuclear enrichment, nuclear power generation and nuclear waste disposal all would take place within the Woomera Prohibited Area — ensuring proper security.

BHP’s Keen

BHP also is keen on expanding Olympic Dam. This would fit with BHP’s announced plan to shift its corporate priorities to developing energy.

With expertise in the US shale gas industry, BHP’s expertise would also be welcome in expanding development of Cooper Basin gas supplies.

Political Support

Prime Minister Tony Abbot approves of expanding Olympic Dam.

Mining is already expanding in the state with, for instance, the opening of the Four Mile mine.

South Australia’s peak business group, Business SA, is officially in favor of expanding the state’s role in the nuclear cycle.

The nuclear industry could provide South Australia a major source of new, clean, profitable power.

It would also open the way for expansion of Olympic Dam. Unionists in the state are starting to express support.

Opening up the Woomera Prohibited Area to commercial use is already estimated to be a $35 Billion opportunity.

Bringing in the nuclear industry could create a multiple of that value.

The way to do this is to complete the nuclear cycle near the source of production — uranium. That, of course, leads to central Australia.

Rapid advances in high-capacity, long-distance HVDC electricity transmission technology is opening up new horizons for industrial reorganization of whole industries.

That, in turn, opens the way for improving nuclear power industry safety through geographic quarantine.

Mining, enrichment, power generation, transmission and waste disposal — all can be done in the Australian Outback. (IMAGE: The Nuclear Cycle).

Mining: Olympic Dam

Olympic Dam: Australia’s Safest Uranium Quarry

By building energy transmission infrastructure to the Outback, Australia gains a long-term ‘call option’ on nuclear power.

These kind of infrastructure already has been proposed.

In 2005, Australian gas major Santos proposed extending the nation’s natural gas pipeline infrastructure out to Moomba and across Australia’s western deserts. Other gas pipeline companies have proposed the same thing.(IMAGE: Santos/Epic/APA/Buru’s Proposed Outback-Spanning Gas Pipelines).

Meanwhile, the Australian Energy Market Operator (AEMO) has costed HVDC power lines stretching from Moomba to Brisbane. TABLE (AEMO’s Estimates of New power line costs)

Advances in HVDC technology have brought down the prices of such power lines to US$600-800MW/km. In the United States and China, prices for such power lines range from $300-500MW/km.

In Australia, HVDC power lines could connect the country’s major east coast cities such as Sydney and Brisbane with Outback-generated low emission energy: like solar, wind, carbon capture-equipped coal and nuclear. IMAGE (Australia’s Future Coal-Gas-Solar-Nuclear Infrastructure)

Given that Asia will require huge amounts of energy in coming years as it emerges as the world’s economic bloc —nuclear energy generated from Australia’s Outback can play a safe, contributing role to provide Asia with low-emission energy.

The Value Chain

Concentrating the nuclear cycle creates a lot of positive outcomes.

It reduces the ‘nuclear miles’ dangerous radiation materials must travel.

It makes the most of scarce skilled labor by geographically concentrating the industry.

As a major producer of uranium, Australia can export value-added electricity to China, Japan and South Korea. This provides Importing countries like Japan and China safe electricity and lower nuclear accident risk.

In return, Japan, South Korea and China could offer the sophisticated technology.

Under this regional development pathway for nuclear — enhanced benefits are created simultaneously with reduced risks. IMAGE (The Nuclear Cycle).

By capturing the entire value chain, Australia frees itself from volatile prices of commodities like uranium.

Mining

Australia has huge reserves of uranium, equivalent to roughly one-third of global supply. This resource is expensive to extract. It requires long-term investment.

A large, dedicated downstream nuclear energy industry able to absorb such production would reduce volatility in demand, reducing the risk premia of long investment.

For instance, since the 2011 Fukushima nuclear disaster in Japan prices of uranium have dropped.

A properly-managed, long-term industry would reduce this volatility. It would do so through better aligning long-term supply and demand. It would also do so through reducing the problem of industry-threatening negative surprises like nuclear accidents.

Australia has a number of uranium deposits and mines.

Australia also has some of the world’s largest supplies of thorium, which may become a nuclear fuel in the future. Given this, Australia could serve a medium-term nuclear industry using uranium, and a longer-term industry using thorium.

Uranium Enrichment

Australia has uranium. So does Kazakhstan and South Africa. However, Australia has an unrivalled reputation for upholding the sanctity of contracts and for honoring safety and non-proliferation objectives.

Engaging in enrichment also eliminates the transport problems involved in uranium. This removes complexity fromthe system.

Northern South Australia is no stranger to uranium processing. A uranium treatment plant existed just north of Port Pirie in the 1950s and 1960s.

Enrichment

Some politicians — particularly in South Australia — believe Australia should capture more of the nuclear ‘value chain’ by engaging in uranium enrichment.

This makes economic sense if it can be done safely.

Given that Australia has a record of security lapses at its Lucas Heights research facility, quarantining the enrichment industry would reassure the public.

The idea isn’t new.

Andrew Michelmore, who headed Western Mining before it was taken over by BHP, in 2005 negotiated with French nuclear giant Areva regarding enriching uranium at Olympic Dam. BHP later bought Western Mining, and the idea didn’t advance any further.

What’s more, a uranium treatment plant operated for several years during the 1950s in Port Pirie, so northern South Australia is no stranger to handling nuclear materials.

Research by the International Energy Policy Institute at the University College London, Australia has estimated a nuclear enrichment industry in Australia alone could generate billions of dollars for the economy.

What’s not to like about multiplying the value of underlying uranium through enrichment and then adding profits through electricity generation, reprocessing and low-cost waste storage?

By engaging in value-added processing of uranium, Australia can garner huge amount of additional wealth in the uranium/nuclear industry, moving itself toward one-time Australian Prime Minister John Howard’s goal of being an “energy superpower”

Power Plant, Electricity: Import the Plants

With a whole of life cycle nuclear industry handling the unique risks and opportunities nuclear power presents, Australia would be an importer of technology and an exporter of value-added electricity and valuable risk management to the rest of Asia in the form of reduced ‘moral hazard’ risk.

Nuclear power plants are an industrial commodity.

They are available, in the words of Australian nuclear expert Ziggy Switkowski, at the drop of a phone call.

Given this, Australia can provide the upstream commodity of mining.

Imported nuclear plants can handle the middle part of the value chain.

Transmission could be handled through imported components like HVDC, which Electranet part owner China State Grid provides.

Transmission

From Woomera, nuclear-generated electricity would be transmitted over high-capacity, high-voltage power lines to Australia’s cities and northward for export to Asia.

Already, Australia has considered building power lines to its interior Outback for the purpose of developing large-scale solar energy and geothermal.

The pathway could be south to Adelaide, east to Brisbane and southeast to Sydney and Melbourne, as well as northward to Darwin.

The benefit of this is that these power lines developed for nuclear could be used in the interim for renewable energy. If renewable energy is not able to provide all the energy needed, a national referendum can be held to approve construction of nuclear power plants in Woomera.

By that time, enough operating history will be available regarding Generation IV nuclear technology for Australian voters to make a knowledgeable choice.

China could be a major buyer of the power. Already, China’s State Grid Corp. has bought into South Australia’s Electranet.

Australia could take advantage of the long-term shift away by Japan from nuclear plants by selling nuclear power to Japan.

Nuclear Waste Disposal

Once nuclear power is generated, the nuclear waste can be buried right at Woomera.

In addition to having its own waste site, Australia could also take in other waste, such as contaminated soiland other material from Fukushima.

This idea has been supported by, among others, former Foreign Minister Alexander Downer.

Australia can become world leader in safety and in securely storing nuclear waste and materials through concentrating it in the Outback. This could include taking a lead on nuclear security issues in Asia.

Australia has synthetic rock and also has considered burial of nuclear waste at Billa Kalina.

Billa Kalina

Billa Kalina was proposed as a nuclear waste dump far back as 1998.

Putting all the waste into one hole also has been supported by Ziggy Switkowski, chairman of the Australian Nuclear Science and Technology Organisation (ANSTO).

Parts of the Woomera Prohibited Area are among the most geological stable in all of Australia. Given that Australia needs a nuclear waste repository, Woomera is the ideal location.

Security

A nuclear power industry located in the Woomera Prohibited Area would be the safest nuclear industry anywhere in the world. Isolated from the outside world in a remote area, it would be impregnable to attack or sabotage.

Nuclear Security

To attack a nuclear power installation at Roxby Downs, terrorists would have to trek through the Outback and then penetrate the Woomera Prohibited Area.

And the only way to get anywhere near Roxby Downs by vehicle on a sealed road is through the tiny town of Pimba, which could serve as a key security checkpoint.

The beauty of all this is that it enhances confidence in nuclear power’s safetythrough geographic quarantine while the next generation of nuclear technology is deployed.

Should this next generation of nuclear power technology prove itself safe at Roxby Downs, a subsequent generation of nuclear plants could be built near Australia’s cities around 2070.

But as long as the new generation of nuclear power plants is untried and untested, and the nuclear industry has atrophied skills, it would be imprudent to put any nuclear plants anywhere near where they can hurt people until they regain their spurs.

Having the entire industry at Woomera also isolates its from the need to truck elsewhere.

The beauty of Woomera is that it provides the scope for virtually infinite expansion of an Asian nuclear industry — depending on demand.

Current estimates are that China, Japan and South Korea have large needs for nuclear power as part of their energy mix.

The Disaster Cycle of Nuclear

There have been three major nuclear accidents in the past 34 years: Three Mile Island (1979), Chernobyl (1986)and Fukushima (2011).

The world’s first commercially-operating nuclear power plant opened in 1954 in Russia. Using that as the dawn of the commercial nuclear era, anaccident has occurred every 19 years.

According to this timetable, the next one should happen around 2030. Most likely, it will occur in China.

By 2030, on current trends, China will have a large amount of nuclear capacity up and running — much of it in highly-populated areas.

If a major accident happens in populous China, it could have global ramifications given China’s economic integration to the world economy.

Given this, a reassessment of risks and benefits of a nuclear regional industry is warranted.

By 2025, a significant proportion of a Pan-Asian Energy Infrastructure could be in place capable of long distance transport of nuclear energy. As a result, any new nuclear capacity could be earmarked for safer locations such as the Australian Outback.

Worst Case: Nuclear Accident

In considering nuclear power safety in case of an accident, two things need to be considered: the transitory spread of low-level radiation over large areas (such as occurred with Chernobyl and Fukushima) and the much smaller exclusion zones that must be created and isolated for years.

In the case of the Australian outback, the exclusion zones would be small. In fact, they could fit largely within an existing exclusion zone: the Woomera Prohibited Area.

Moral Hazard Risk

There are two ways to credibly handle the moral hazard risks of nuclear energy so that industry wears the risk, not society.

The first is to require the industry to carry unlimited private insurance for accidents. The second is to require senior nuclear industry personnel to live in the nuclear zone, and require they be the last evacuated in an emergency.

Require Unlimited Insurance

Requiring unlimited private insurance eliminates the moral hazard problem of society being stuck with a cleanup problem. It also puts a price on the risk the industry poses to society.

Only the private insurance industry has the expertise to make such judgments. Fluctuations in the price of such insurance from private industry can serve as an early warning system of problems.

It would do more than any number of government safety inspections in ensuring the nuclear industry is run correctly.

Given the nuclear industry’s assurances regarding the absolute safety of new nuclear power designs, carrying unlimited insurance represents a negligible hurdle. If the private insurance industry agree, such unlimited liability coverage for the nuclear industry would be available at negligible cost..

Insurance is already paid on shipments of uranium, so thefinancial infrastructure for handling these risks already is in place. In addition, the ‘eliminated insurance’ of ‘nuclear miles’ not travelled would help offset the unlimited liability premiums.

It would also eliminate the ad hoc shambles that currently reigns in nuclear material transport.

Require Senior Executive Personnel Onsite

Part of the ‘moral hazard’ risk involved in nuclear is that corporations (Japan’s TEPCO is an example) may dump the civil, financial and safety hot potato of a nuclear accident on government.

Locating the nuclear industry and its top executives in the Woomera Prohibited Area solves that problem. Their willingness to live there can then be considered a reasonable proxy for industry safety, and should result in better procedures being developed for dealing with an accident.

Conclusion: The Economics

Everyone agrees: nuclear power should succeed or fail on its economics.

The question is: what to include and exclude in figuring out costs.

Nuclear power can generate electricity cheaply. But nuclear power also involves huge ‘moral hazard’ risks in the form of disasters taxpayers must pay for.

The economic question is how to get the ‘good’ of nuclear power without the ‘bad’ of shifting unquantified, unlimited risk away from the industry and onto the public.

This study recommends geographic quarantine as the solution.

Should nuclear’s accident costs create problems, these would be borne by the industry alone. Should nuclear prove safe, the next generation of nuclear plants could be built near cities.

Without a doubt, the world needs an ‘all of the above’ energy strategy to combat climate change and revitalize the planet’s ravaged ecology. Nuclear energy can be part of the mix.

As part of a balanced, non-discriminatory plan to allow all kinds of new power sources to be developed without huge, implicit hidden subsidies (like implicit disaster insurance), the marketplace can pick the winner.

Given this, the best ‘all of the above’ strategy would involve creating the delivery infrastructure and allowing market competition to do the rest. It worked well with the Internet. It can work well with energy.

A Pan-Asian Energy Infrastructure allows this to happen. When it does, the nuclear industry’s true economics can be weighed against other energy sources.